Pooling emerged as the dominant compliance mechanism in the first year of FuelEU Maritime reporting, with 92% of vessels utilizing the approach, according to an analysis by P&I club Skuld.

The analysis, authored by Skuld's decarbonisation and transition risk lead Matias Bøe Olsen, draws on European Commission data and the Maersk Mc-Kinney Møller Center for Zero Carbon Shipping's review of the first reporting year, alongside an interview with the Center's climate policy manager Joe Bettles.

FuelEU Maritime, which took effect on 1 January 2025, requires ships above 5,000 gross tonnage calling at EU ports to reduce the greenhouse gas intensity of their onboard energy use. The regulation sets an initial 2% reduction target against a 2020 reference level, rising to 6% in 2030 and increasing further in subsequent years through 2050.

Only 2% of vessels opted for the borrowing mechanism, which allows a compliance deficit to be deferred to the following year at a 10% surcharge. The remaining vessels either paid the penalty or met the target directly using LNG or other low-GHG energy sources.

The average price of compliance surplus hovered around EUR 208/tCO2eq and remained relatively stable throughout the year, suggesting the market matured early, with buyers generally able to find sellers.

"The prices for trading compliance surpluses remained well below the EUR 640/tCO2eq penalty for VLSFO, making the pooling mechanism significantly more attractive than paying the penalty," Bettles said in the interview.

The Center estimates that 3.22 million tonnes of CO2-equivalent reductions — relative to an all-VLSFO fleet — will be required to meet the 2% reduction target between 2025 and 2029. LNG is estimated to have contributed around a third of the reduction achieved so far, with biofuel blends, dominated by biodiesel and bio-LNG, accounting for the remainder.

"Although LNG is not a drop-in replacement for VLSFO, the pooling mechanism under FuelEU allows an LNG-fuelled vessel to share its over-compliance with other vessels that cannot physically use LNG," Bettles explained. "Depending on the engine type in the ship, LNG can remain compliant with the 14.5% reduction target through 2039 and can further extend its compliance through banked surplus or by using liquified biomethane."

The first-year results carry significance beyond Europe, according to Bettles, as IMO member states prepare to resume negotiations on the Net-Zero Framework. The IMO has targeted adoption of mid-term measures — including potential economic mechanisms and a GHG fuel standard — in 2025, with entry into force expected around 2027.

"FuelEU demonstrates that it is possible for the global fleet to comply with a GHG intensity regulation using existing fuels and providing incentives for the uptake of cleaner energy sources," he said.

The analysis identifies three key lessons from the first reporting year. First, a fuel standard for shipping can function effectively. Second, regulations should incorporate mechanisms that support a broader mix of energy sources, given the limited uptake of wind-assisted propulsion, e-fuels, and onshore power. Third, policy stability paired with clear reduction pathways strengthens the business case for investment in cleaner alternatives.

Skuld serves as a Mission Ambassador to the Center, supporting its work on collaboration and knowledge sharing across the maritime value chain.